Reacting to news of cost of living crisis measures announced by the Chancellor, Hannah Essex, Co-Executive Director of the BCC, says the Government must act quickly to prevent a stranglehold being put on the economy.
Calling for a VAT cut on business energy prices to directly ease some of the pricing pressure and break the inflationary cycle, she said: “The sheer scale of the cost-of living crisis facing the British public means the Government is absolutely right to provide additional support to those worst affected.
“For business, the toxic mix of inflation, raw material costs and supply chain disruption is the flip-side of the coin to the problems facing consumers.
“Unless steps are also taken to ease business costs, they will likely feed into the inflationary pressure on the economy and quickly eat into the financial support announced.
“A reduction in VAT to 5% on businesses’ energy bills would directly alleviate some of this pressure to raise prices. The Treasury must urgently consider the actions set out in our call for an Emergency Budget which would provide a way to break the inflationary cycle.
“If we can ease the pressure on businesses then they can keep a lid on the price rises. Firms will then have the breathing space they need to raise productivity and strengthen the economy – but a change of course is needed now. If the government does not act quickly, then rising costs will put our economy in a stranglehold.”